Citing improving business travel levels, CBRE Hotels
Research on Thursday projected 2025 U.S. hotel occupancy, average daily rate
and revenue per available room each would increase from 2024 levels.
The firm in a statement suggested hotels in urban areas
would outperform its forecast of a 2 percent year-over-year increase in 2025
RevPAR "due to improved group and business travel and continued recovery
of inbound international travel." Urban hotel RevPAR is forecast to
increase 2.8 percent.
CBRE projected 2025 U.S. ADR to increase 1.6 percent year
over year and occupancy to increase "23 basis points," or about 0.23
of a percentage point.
"The U.S. hotel market is poised for steady growth in
2025, primarily led by continued outperformance of the urban segment," CBRE
head of hotel research and data analytics Rachael Rothman said in a statement.
CBRE indicated its forecast was based on a projected 2.4
percent year-over-year increase in 2025 U.S. gross domestic product and average
inflation of 2.5 percent, and noted any increase in hotel supply would be
constrained by high financing and construction costs. "Potential
additional tariffs, labor shortages or the Fed pulling back on further interest
rate reductions could temper supply growth even more, enhancing pricing
leverage and elevating replacement costs for existing assets," CBRE noted.
The company noted it projected annual year-over-year U.S.
RevPAR increases of 1.5 percent to 3.5 percent "over the next several
years, barring a recession."
Hotel analytics firm STR last month released a similar
forecast, calling for 2025 U.S. RevPAR growth of 1.8 percent year over year and
ADR growth of 1.6 percent.